Recently Retired Left Workforce Earlier than Planned
PITTSBURGH -- Almost half, 49%, of Americans in their prime retirement planning years believe they will need to work longer than they had planned to save enough to retire. But 58% of those 70 and younger who have already left the workforce did so earlier than planned, finds a new survey from PNC Financial Services Group Inc.
"The survey clearly shows that the age at which people expect to retire is not always in their control," said Celandra Deane-Bess, vice president and senior wealth planner with PNC, which recently released the third PNC Perspectives on Retirement Survey. "Economic uncertainty, employer actions and unexpected health issues often force individuals to retire earlier than they planned, which puts a premium on sound financial habits early."
Some 42% of those the survey refers to as "Planners" consider themselves to be on track in their preparation for retirement, and 35% of those dubbed "Procrastinators" recognize the need to prepare but acknowledge they put it off. A final group, tagged "Avoiders," which constitute 23% of the respondents admit they are well behind in their retirement planning.
The result is a difference of almost three years in expected retirement age when each group wants to retire. The "Planners" group on average expects to retire at 65.7 years while the "Avoiders" on average believe they have to retire at 68.2.
Good fianncial habits play a role in successful planning, the survey showed. Of the Planners group, 79% have made a habit of participating in an employer-sponsored retirement plan compared to just 39% of Avoiders.
PNC's survey also found that women have more doubt than men about their ability to achieve a secure retirement. Fully 51% of women, compared to 40% of men, agree with the statement, "I'm afraid I may not be able to retire."
Some 38% of women and 48% of men believe they are prepared for retirement while 79% of men and 70% of women say they have made saving for retirement a habit. "Good financial planning is just as critical, if not more so, for women," Deane-Bess said. "If they are married, they should be equally involved with financial planning with their spouses and if they are single they need to be in control of their planning as early as possible."
Other survey findings:
- On average, those not yet retired plan to do so by the time they are 67 and expect they'll need to fund a retirement of 21.5 years.
- The most frequently named "burning question" about retirement saving is how to consider health-care expenses, named by 50% of adults in prime retirement planning years.
- Of those 70 or younger already retired, 58% retired before they had planned, with 40% retiring early because of health-related issues and 26% because of issues with their employer -- typically forced early retirement or layoffs.
- Forty-five percent say they will rely most on either their employer's retirement plan or Social Security for their income, while another 44% expect to be either entirely or mostly responsible for their retirement savings.
The survey confirms the trend of fewer employers offering pensions; 64% of retirees report receiving a pension and 45% say their pension provides a large contribution to their retirement. However, of those not retired and still working, only 43% have a pension.
Published by The Business Journal, Youngstown, Ohio.
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